Store of the Week: Aldi

While the local column inches have been predominantly aimed at the teething troubles of compatriot discounter Lidl, Aldi is steadily building its presence in the USA with no small measure of investment and ambition.

With a goal of expanding its network to 2,500 stores by 2022 in a $3.4 billion push – in addition to a $1.6 billion refurbishment programme – Aldi is looking to exert even more of a disruptive impact on the US grocery sector.

Another interesting move, recently echoed by the retailer’s intention to open a food outlet within the Karstadt department store in Hamburg, is the plan to open food stores in 10 Kohl’s department stores in the USA, a pilot that will seek to prove if co-location will be mutually beneficial. I’m sure it will be.

As it is doing all over the world, Aldi is also working hard in the US to improve its proposition, with more space devoted to fresh, a bit more of a slant towards to convenience and a more expansive product range to cover off additional shopper needs.

The unimproved stores that I’ve visited over the last year or so can be a little ropey, while those that have received the new look really are rather impressive. Aldi obviously prioritised its stores in Virginia and the Carolinas in terms of sprucing them up ahead of Lidl’s market entry last year and this store in Winston-Salem, NC, is a couple of miles away from a new Lidl, as well as in close proximity to a Walmart and a Food Lion, both renowned for a stringent approach to value too.

Despite its improved look and feel, this value message is still front and centre of Aldi’s positioning. Indeed, a hard-to-miss bit of signage in the store’s entrance presented the outcome of some shopper research, proclaiming Aldi to have been named as the value leader in the market for seven years on the bounce, well ahead of both Walmart and Kroger.

You are never far away from a price message or two across the rest of the store, but it was interesting to see that the bulk of communications were devoted to quality, provenance and responsibility.

There was much more of a priority placed on organics, with a fixture devoted to USDA organic produce, while the meat and fish ranges were festooned with USDA and MSC accreditation. There was a decent smattering of Fair Trade lines throughout the rest of the range. All of this combines to underline a strong quality and responsibility message alongside the equally convincing price positioning.

There were plenty of brands in the mix, often with the trademark discount hallmarks of multi-SKU outers and split cases to help with efficiency, although – as ever – it was Aldi private labels to the fore. There was, of course, the usual aisle of pleasingly random general merchandise as well as an end-cap devoted to Hispanic grocery, a reflection of the fact that Aldi is slowly getting to grips with ethnic sourcing and merchandising, something that has not really been a strong point for the retailer around the world.

The fact that more space has been allocated to chilled and fresh gave these departments an improved feel, with produce in particular looking much improved with its Aldi Fresh signage and ‘wooden’ fixtures helping shoppers overlook the functional SRP. The store’s much improved lighting and use of colourful graphics enlivened the experience no end and also helped in terms of navigation. The wine range was a bit good too…

This refresh is a huge improvement and augurs well for the retailer’s growth programme. It also indicates that Aldi, as we know from other markets, will not be shy in terms of going toe to toe with Lidl, both in terms of instore experience as well as pricing. Despite the fact that some commentators are ludicrously writing the obituary for Lidl USA after a couple of tiny missteps in its first year, both operators regard new countries as marathons rather than sprints. Aldi’s refresh programme is very smart. This, coupled with its new store ambitions, will mean that more and more supermarkets will have to master the art and the science of coexisting with discounters.